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China, Taiwan Near Agreement
On Direct Shipping Via Strait

By

Leslie Chang Staff Reporter of The Wall Street Journal

Updated Jan. 23, 1997 12:01 a.m. ET

TAIPEI, Taiwan -- China and Taiwan found common ground in talks aimed at allowing direct shipping across the Taiwan Strait, nearing a resolution of a major worry for Taiwan companies with mainland investments.

At a meeting Wednesday in Hong Kong, shipping executives and officials from both sides agreed that Taiwan shippers can apply to sail to two Chinese ports -- something that has been banned since the two sides split in a civil war nearly half a century ago. The issue has taken on urgency as only five months remain until the return of Chinese sovereignty over Hong Kong, through which Taiwan shuttles the bulk of its mainland trade and investments.

The most promising aspect of the accord is that longtime adversaries now are showing the will to sidestep politics and hammer out the details, analysts say. While both sides issued separate regulations on direct shipping last year, this is the first time they have sought and found common ground.

"We hope that not far in the future, bilateral cross-strait shipping could take place," Meng Guangju, who headed the Chinese team, said after the meeting.

Chinese shipping authorities first must review Taiwan shippers' applications before direct navigation can start. Barring a dive in relations, that could happen by year end, industry observers say.

Under the accord, shipping associations from both sides are to notarize Taiwan shippers' applications to sail to the mainland ports of Fuzhou and Xiamen, said Hsin Chiang-lin, a spokesman for Taiwan's transport ministry. This suggests that governments will try to stay out of the picture -- along with the prickly political questions on which cross-strait relations have always foundered.

"It's a positive step. Both sides have been trying to get a compromise agreement ... and they're trying to keep politics out of it," said James Wang, a senior analyst at Peregrine Securities (Taiwan) Ltd. in Taipei.

That bodes well for resolving a more crucial, though less symbolic, issue: the terms under which Taiwan ships will continue to sail to and from Hong Kong after the territory reverts to Chinese rule.

As one of the world's busiest and best-run ports, Hong Kong is the conduit of choice for Taiwan businesses to pursue investment and trade in China. Even when China opens up its ports, many of them -- including Fuzhou and Xiamen -- will be too shallow to handle the massive container ships with which Taiwan trades around the world.

Wednesday's agreement is only a small step forward from last August, when China announced it was opening selected ports to Taiwan ships. Many shippers filed applications soon afterward, but China has yet to respond to the applications, shippers say.

The consensus reached Wednesday also highlights how much is left undone. For example, Taiwan has said in the past that only ships flying foreign flags can ply the cross-strait route; Beijing wants only Chinese and Taiwanese ships to sail what it calls a "domestic" route, underscoring its claim to the island, which it views as a Chinese province.

Also unresolved is how, and whether, Chinese shippers could sail to Taiwan ports -- and whether they would come under the authority of a government that Beijing doesn't recognize. "For Chinese shippers to come to Taiwan to apply, it would mean accepting the sovereignty of Taiwan," said Mr. Wang.

China, Taiwan Near Agreement
On Direct Shipping Via Strait

TAIPEI, Taiwan -- China and Taiwan found common ground in talks aimed at allowing direct shipping across the Taiwan Strait, nearing a resolution of a major worry for Taiwan companies with mainland investments.